Deutsche Bank Exceeds Expectations, Sees 763 Million Euros in Net Profit in Q2 2023

Deutsche Bank has just released its quarterly report and it appears that the bank has outperformed analysts’ projections. This follows after Reuters previously held a poll asking analysts to project Deutsche Bank’s net profit for the quarter. And at the time, the analysts predicted a 737 million euros net profit.

According to the Wednesday report, however, the bank saw a net profit of 763 million euros (approximately $842 million) in the second quarter of 2023. Although the figure shows a significant (27%) decline in the bank’s net profit for Q2 2022, it still surpasses expectations considering the impacts of inflation and other factors.

Deutsche Bank Shows Good Growth Momentum amid Jump in Costs in Q2 2023

The latest report marks Deutsche Bank’s 12th straight quarterly profit since it implemented a restructuring plan back in 2019. At the time it set out to restructure, the German lender revealed that it aims to cut costs and improve profitability. And now, the profitability aspect appears to have been established.

Regarding costs, however, there appear to be some issues. Deutsche reports a 15% year-on-year increase in its second-quarter non-interest expenses, amounting to 5.6 billion euros. Its adjusted costs are up 4% to 4.9 billion euros. And non-operating costs include 395 million euros in litigation charges and another 260 million euros linked to restructuring.

But despite the jump in costs, Deutsche insists that it is still focused on cutting costs.  And in line with that focus, Deutsche Bank CFO James von Moltke told CNBC that the bank had even increased its target for cost savings.  That is from 2 billion euros to 2.5 billion euros. von Moltke also added that Deutsche continues to make strategic business investments aimed at boosting future revenue growth.

According to him, there will always be a cost situation. However, maintaining a balance is what Deutsche is more focused on. von Moltke said in part:

“In recent quarters, we’ve succeeded very well, we’ve delivered on our guidance of costs essentially flat to the fourth quarter of last year.”

Deutsche Bank also shared its plans to launch up to 450 million euros of share buybacks in 2023. According to the Tuesday announcement,  the buybacks are expected to start in August. However, the bank anticipates that the total capital returned to shareholders will top 1 billion euros this year. That is as opposed to the nearly 700 million it saw in 2022.